It seems like every day, a distillery is releasing a new “exclusive” or super premium bottle that retails in the hundreds, or in the case of Buffalo Trace’s new Prohibition Collection, into the thousand-dollar price range. Many of these are coming from the same distilleries that have publicly campaigned against secondary market prices for their products.
So why are distilleries starting to charge hundreds and hundreds of dollars for their bottles while simultaneously complaining about secondary market prices? In order to derive at an answer, we must first understand and accept two things. First, we have to understand and accept the secondary market is alive and well, it’s not going away, and people are more than willing to spend hundreds, and sometimes thousands of dollars on an “exclusive” or allocated bottle. Distilleries have obviously taken notice.
Second, we must take a look at the numbers. It’s going to get a bit “mathy” here, but bear with me. According to the February 9, 2023, Distilled Spirits Council’s Annual Economic Briefing, spirit sales in the United States increased from a market share of 28.7% in the year 2000, to 42.1% of the market share in 2022, overtaking beer sales for the first time ever (Swonger, et.al.). Sales of American whiskey increased from approximately 13,000 cases to over 31,000 cases during that same period. That’s a 133% increase. This is where it gets interesting. Over that same period, super premium brand sales increased 1,537%. Let’s look at this another way. While value brand sales increase approximately 5% year over year, super premium brand sales are increasing at three to four times that rate (American Whiskey, n.d.). How much money are we talking here? In 2022, American whiskey sales were $5.1 billion in the U.S. alone. If we add international sales, that’s another $1.3 billion. Again, just in 2022.
Distilleries are businesses, and like any other business, the goal is to make money. Savvy distillery managers have taken notice that we are willing to spend hundreds and hundreds of dollars on super premium, or allocated bottles. They have also looked at the data and saw that super premium brand sales have increased three times the rate as their value brands, year over year, for the past two decades. It’s no wonder distilleries are putting out these limited quantity, super premium bottles at much higher price points. It makes complete business sense. I’m not saying everyone will agree with it, but I am saying I understand it. Why let the secondary market make all the money when the distilleries are taking all the financial risks?
Now, am I going to be seeking out these super premium distillery releases? Let’s be honest. Yes. Yes I am.
Cheers!
References
American Whiskey – distilledspirits.org. Spirits Rich in Flavor & Heritage. (n.d.).
